Good Governance for Medicines. Model Framework Updated version 2014

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1 Good Governance for Medicines Model Framework Updated version 2014

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3 Good Governance for Medicines: Model Framework Updated version 2014

4 WHO Library Cataloguing-in-Publication Data Good governance for medicines: model framework, updated version Drugs, Essential standards. 2.Pharmaceutical Preparations standards. 3.Drug Industry ethics. 4.National Health Programs. 5.Conflict Interest. I.World Health Organization. ISBN (NLM classification: QV 736) World Health Organization 2014 All rights reserved. Publications of the World Health Organization are available on the WHO website (www.who.int) or can be purchased from WHO Press, World Health Organization, 20 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: ; fax: ; Requests for permission to reproduce or translate WHO publications whether for sale or for non-commercial distribution should be addressed to WHO Press through the WHO website (www.who.int/about/licensing/copyright_form/en/index.html). The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted and dashed lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of specific companies or of certain manufacturers products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use.

5 Acknowledgements Contents Acknowledgements Acronyms Chapter 1. Introduction to the Good Governance for Medicines programme 1 The problem of corruption 1 Poor governance and corruption 1 Types and causes of corruption 2 Corruption in health 2 Corruption in the pharmaceutical sector 4 Background of anti-corruption initiatives 6 Overview and progress of the Good Governance for Medicines programme worldwide 7 Chapter 2. Basic components of the model framework 10 Values-based strategy Key ethical principles Code of conduct Socialization of key ethical principles Promoting ethical leadership 12 Discipline-based strategy Enforcement of existing anti-corruption legislation Mechanisms for whistleblowing Sanctions on reprehensible acts Transparent and accountable regulations and administrative procedures Collaboration among anti-corruption and transparency initiatives: strengthening linkages Management, coordination and evaluation 16 Chapter 3. Process for developing national good governance for medicines framework 18 Step I. GGM Information meeting and presentation of the national transparency assessment results 19 Step II. First national GGM workshop to initiate the country GGM framework 20 Step III. Second national GGM workshop 22 Step IV. Third national GGM workshop 23 Step V. GGM framework training workshop 23 Step VI. Institutionalizing the national GGM framework and programme 24 v viii iii

6 Good Governance for Medicines: Model Framework Chapter 4. Challenges and successes in developing a national good governance for medicines framework 25 Common challenges 25 Common successes 25 Chapter 5. Conclusions 26 Annexes 27 Annex 1 29 Annex 2 33 Annex 3 38 References 40 Tables Table 1. Types of corruption 3 Table 2. Example of an action plan (1) 21 Table 3. Example of an action plan (2) 21 Figures Figure 1. Examples of unethical practices that can happen throughout the medicines chain 5 Figure 2. WHO model process to implement the Good Governance for Medicines programme 8 Figure 3. Complementary GGM strategies 11 Figure 4. Six steps to achieve good governance for medicines 18 Boxes of country examples Box 1. Legal incorporation of the Code of Conduct and declaration of Conflict of Interests in Mongolia 13 Box 2. Legislation regarding whistleblowing in Malaysia 14 Box 3. Sanctions for corruption in the pharmaceutical field: Syrian Republic 14 Box 4. The Lebanese Regulations on Inspection and Drug Control 15 Box 5. Political will in Jordan 16 Box 6. Management and coordination of funding the GGM programme in the Philippines 17 Box 7. Example of GGM Step I: Jordan 19 Box 8. Example of GGM Step I: Bolivia 19 Box 9. Example of GGM Step II/III: Lebanon 22 Box 10. Example of GGM Step II/III: Philippines 22 Box 11. Example of GGM Step II/III: Thailand 22 Box 12. Example of GGM Step IV: Jordan 23 Box 13. Example of GGM Step V: Malaysia 23 Box 14. Example of GGM Step V: Mongolia 23 Box 15. Example of GGM Step VI: Philippines 24 Box 16. Example of GGM Step VI: Malaysia 24 iv

7 Acknowledgements Acknowledgements Special thanks are extended to Dr Guitelle Baghdadi-Sabeti for her global programme leadership and valuable contributions in implementing the WHO Good Governance for Medicines (GGM) programme worldwide from , helping to increase transparency in the pharmaceutical sector. The efforts of the following staff and collaborators are also gratefully acknowledged: Dr Gilles Bernard Forte, Coordinator of the WHO Medicines Programme and Dr Cécile Macé, Technical Officer, for providing the current global leadership for the GGM programme; and Dr Mohamed Ramzy Ismail, Technical Officer, WHO Regional Office for the Eastern Mediterranean, who gave support to the GGM programme at global level in All contributed to the finalization of this document. Appreciation in memoriam: Dr Eloy Anello was the author of the first draft of this framework in 2007 and made inestimable contributions to the Good Governance for Medicines work. Some elements of his first draft have been included in this current model framework. Dr Anello passed away in October Thanks and acknowledgements go to Dr Didar Ouladi, the author of this document, for continuing the work of Dr Anello and for her valuable contributions to the programme as part of the global GGM technical team. Furthermore the following experts and country representatives are hereby recognized for their contribution to the development of this model framework by giving their valuable insights and feedback on the draft versions and/or sharing the GGM experiences and successful examples in their countries. Good Governance for Medicines Advisory Group, Global Technical Team and external reviewers (in alphabetical order) Dr Dato Eisah Abdul Rahman, Senior Director of Pharmaceutical Services, Ministry of Health, Kuala Lumpur, Malaysia (Technical Team) Dr Mohamed Abdelhakim, Technical Assistant, Essential Medicines and Pharmaceutical Policies, WHO Regional Office for the Eastern Mediterranean, Alexandria, Egypt (Technical Team) Ms Dardane Arifaj, former Senior Technical Officer, Pharmaceuticals Essential Medicines and Technologies Unit, WHO Regional Office for the Western Pacific, Manila, Philippines (Technical Team) Ms Carole Belisario, Executive Director, Procurement Watch Inc., Manila, Philippines (Technical Team) Dr Maryam Bigdeli, Programme Officer, WHO Alliance for Health Policy and Systems Research, Geneva, Switzerland (Technical Team) Dr Moses Chisale, Regional Adviser, Essential Medicines Program/Division of Health Systems and Services Development, WHO Regional Office for Africa, Libreville, Gabon (Technical Team) Dr Kees de Joncheere, Director, WHO Department of Essential Medicines and Health Products, Geneva, Switzerland v

8 Good Governance for Medicines: Model Framework Dr Adi Fawzi Nuseirat, Head of Rational Drug Use Department, Jordan Food and Drug Administration, Amman, Jordan (Technical Team) Ms Fiona Fleck, News Editor, WHO Department of Knowledge Management and Sharing (External Reviewer) Dr Kerstin Leitner, Germany (Former Global Chair, GGM Advisory Group) Ms Loraine Hawkins, Consultant, Department for International Development, London, United Kingdom (External Reviewer) Dr Rasha Hamra, Director Health Education Department, Ministry of Health, Beirut, Lebanon (Technical Team) Dr Andreas Seiter, Senior Health Specialist Pharmaceuticals, World Bank, Washington DC, USA (External Reviewer) Dr Chanvit Tharathep, Deputy Permanent Secretary, Office of Permanent Secretary, Ministry of Public Health, Nonthaburi, Thailand (Technical Team) Dr Mirza Zafar Ullah, Coordinator, WHO Department of Public Health, Innovation, Intellectual Property and Trade, Geneva, Switzerland (GGM Advisory Group) WHO Team and Good Governance for Medicines Phase II and III country representatives (in alphabetical order) Dr. Habib Abboud, Director of National Drug Quality Control and Research Laboratories, Ministry of Health, Damascus, Syrian Arab Republic Dr Dalia Badawi, Director of Healthcare Planning and Development, Dasman Diabetes Institute, Dasman, Kuwait Dr Salmah Bahri, Director of Pharmacy Practice and Development, Ministry of Health, Putrajaya, Malaysia Mr Mohamed Bin Shahna, Regional Adviser, Essential Medicines and Pharmaceutical Policies, WHO Regional Office for the Eastern Mediterranean, Alexandria, Egypt Ms Munkhdelger Chimedtseren, Head, Division of Pharmaceuticals and Medical Devices, Ministry of Health, Ulaanbaatur, Mongolia Ms Valentina Ciumeica, Drug Information Centre, Medicines Agency, Chisinau, Republic of Moldova Dr Victoria De Urioste, Sub Regional Adviser, Biological Medicines, WHO Country Office, La Paz, Bolivia Dr Maisaa Fahed Nasr, Drug Inspection Directorate, Ministry of Health, Damascus, Syrian Arab Republic Dr Melissa Guerrero, Program Director, National Center for Pharmaceutical Access and Management, Department of Health, Manila, Philippines Dr Ileana Herrera G., Health Regulation, Ministry of Health, San José, Costa Rica Dr Niyada Kiatying-Angsulee, Director, Social Research Institute, DSMDP, Chulalongkorn University, Thailand Dr Arta Kuli, National Professional Officer, WHO Country Office, Skopje, The former Yugoslav Republic of Macedonia Professor Frederic Loko, Directeur des Pharmacies, Ministry of Health, Cotonou, Benin Dr Alfred Dansou, Assistant Head Manager, CAME, Cotonou, Benin Dr Nelly Marin, Regional Adviser, Essential Medicines, WHO Regional Office for the Americas, Washington D.C., United States of America Dr Sana Naffa, Heath System Strengthening Officer, WHO Country Office, Amman, Jordan Ms Jesselle Anne M. Navarro, National Center for Pharmaceutical Access and Management, Department of Health, Philippines vi

9 Acknowledgements Ms Rosminah binti Mohd Din, Deputy Chief Pharmacist, Kuala Lumpur Hospital, Kuala Lumpur, Malaysia Dr Clive Ondari, Coordinator, Medicines Access and Rational Use, WHO Department of Essential Medicines and Health Products, Geneva, Switzerland Ms Agnetta Peralta, Director, Bureau of Health Devices and Technology, Department of Health, Manila, Philippines Dr Alissar Rady National Professional Officer, WHO Country Office, Beirut, Lebanon Dr Lembit Rago, Coordinator, Quality and Safety of Medicines, WHO Department of Essential Medicines and Health Products, Geneva, Switzerland Professor Renata Slaveska Raichki, Faculty of Pharmacy, Vodnjanska, Former Yugoslav Republic of Macedonia Ms Grace Regina, GGM Project Assistant, National Center for Pharmaceutical Access and Management, Department of Health, Manila, Philippines Professor Tsetsegmaa Sanjjav, Dean, School of Pharmacy, Health Sciences University, Ulaanbaatur, Mongolia Dr Robert Louie So, Medical Officer VII/ Program Manager, National Center for Pharmaceutical Access and Management, Department of Health, Manila, Philippines Ms Wilma Teran, Medicines Unit, Ministry of Health, La Paz, Bolivia Ms Catherina Maria E. Timmermans, Senior Technical Officer, Pharmaceuticals Essential Medicines and Technologies Unit, WHO Regional Office for the Western Pacific, Manila, Philippines Dr Zahira Tinoco, Chief of the Drug and Clinical Therapeutic Department, Social Security, San José, Costa Rica Ms Lucia Turcan, Health Department, Medicines Agency, Chisinau, Republic of Moldova Dr Gerson Uzquiano, Coordinator/Liaison SEDES Santa Cruz- WHO Office, Santa Cruz de la Sierra, Bolivia WHO is grateful to the Australian Agency for International Development, the Federal Ministry for Economic Cooperation and Development in Germany, the Government of Kuwait, the United Kingdom Department for International Development and the European Community, without whose generous support the achievements of the Good Governance for Medicine programme described in this report would not have been possible. vii

10 Good Governance for Medicines: Model Framework Acronyms BERI COI CPI CSO EU GDP GGM ICRG MOH MDGs OAS OECD PACI UNCAC WHO Business Environmental Risk Intelligence Conflict of interest Corruption Perceptions Index Civil society organizations European Union Gross Domestic Product Good Governance for Medicines programme International Country Risk Guide Ministry of Health Millennium Development Goals Organization of American States Organisation for Economic Co-operation and Development Partnering Against Corruption Initiative United Nations Convention Against Corruption World Health Organization viii

11 Acknowledgements CHAPTER 1 Introduction to the Good Governance for Medicines programme The problem of corruption Corruption has long plagued organized societies. From ancient China to modern-day Europe and North America, governments and societies have struggled to contain this cancer. Thousands of years of literature document the presence of corruption (1). It is found in rich and poor, developing and developed countries alike, albeit in different forms and magnitude. The corruption that prevails is a clear indicator of the profound moral crisis that many societies are experiencing. The It is the bane of society an incurable cancer a social evil that impedes economic growth, induces inequality, deepens poverty and results in the exploitation of the poor. Druk Phuensum Tshogpa Manifesto (3) and disrespect for constitutional institutions and authority. It reflects a democracy, human rights and governance deficit that negatively impacts on poverty and human security. High levels of corruption can lower the level of human development by reducing economic growth, increasing poverty and inequality, raising the costs and reducing the quality of services such as health and education (5,6). Corruption has been a matter of increasing concern for the international development agenda and is recognized as one of the biggest impediments to the world s efforts to reach the Millennium Development Goals (MDGs) (7). Poor governance and corruption Corruption is the abuse of entrusted power for private gain. Definition of corruption endorsed by Transparency International (2) social injustices and the poverty that more than half of humanity endures, together with the deterioration of public trust generated and perpetuated by corruption, have greatly diminished the capacity of society s time-honoured institutions to govern human affairs for the common good. In essence, corruption is an act by individuals who unlawfully and wrongly use their official position to benefit themselves or someone related or close to them at the cost of others (4). Corruption fosters an anti-democratic environment characterized by uncertainty, unpredictability, declining moral values Corruption can kill for example, when corrupt officials allow medicines to be tampered with, or when they accept bribes that enable terrorist acts to take place it is a major obstacle to achieving our Millennium Development Goals. Ban Ki-moon, United Nations Secretary-General, at the launch of the Stolen Asset Recovery Initiative, 2007 Empirical research over the past decade has shown convincingly that poor governance, typically manifested by different forms of corruption, is a major deterrent to investment and economic growth and has had a disproportionate impact on the poor. In-depth case studies have given form and life to these quantitative findings and have brought home the reality that corruption is indeed harmful to the individual, family, community, and society as a whole. Globally, public awareness of the detrimental impact and severity of the problem has increased markedly, as the media, policy institutes, and nongovernmental organizations worldwide have raised concerns to unprecedented levels. 1

12 Good Governance for Medicines: Model Framework By the late 1990s, the World Bank Institute had developed a comprehensive data set covering broader governance concerns. This data set covers six dimensions of governance: control of corruption; rule of law; government effectiveness; regulatory quality, voice and accountability; political stability; and the absence of violence. They provide a picture of the overall state of governance in a country, and are derived from several hundred individual variables measuring perceptions of governance, drawn from 37 separate data sources constructed by 31 different organizations (8). Through aggregation of the numerous individual variables, the six indicators tend to have significantly smaller margins of error than any individual measure. Macro-level econometric-based studies have established a strong causal link between corruption and, more broadly, poor governance on the one hand and weak private investment and growth on the other. A number of comparative country studies have also been conducted on combating corruption. While not all are statistically based, they nonetheless provide empirical analyses of reforms and strategies (9 16). As Mauro (1995) estimates, a one standard deviation increase (improvement) in the corruption index is associated with an increase in the investment rate by 2.9% of Gross Domestic Product (GDP) (17). Empirical studies by institutions like the World Bank, the International Monetary Fund and the Asian Development Bank reveal that corruption reduces economic growth in a country by 0.5-1% a year (18 20). Types and causes of corruption The types and causes of corruption are diverse socially, culturally, economically and politically. Scholarly research into the causes and consequences of corruption goes back several decades (21). Although there are many types of corruption, they can be grouped into two broad areas, often referred to as petty and grand. Petty corruption is small-scale corruption practised by lower-level public servants who extort bribes for their services and who often perceive and justify their corrupt behaviour as a survival mechanism to compensate for low salaries. Petty corruption can have a profound debilitating effect on the integrity of a nation and its existence often indicates the practice of grand corruption by high-level public servants. Grand corruption is large scale and often involves significant, international bribes and hidden overseas accounts. It is frequently fostered by exporters from countries (particularly industrialized countries) who may (knowingly or unknowingly) offer tax breaks for the bribes paid and refuse to regard the trans-border corruption of public officials as criminal behaviour. This type of corruption seems to be motivated more by greed than by need. Each broad area incites the other. Within these two general levels, a variety of types of corruption can fall in either petty or grand corruption or both. These types of corruption have different causes and risk areas as was established from the findings of the Corruption Perception Survey 2007, the Corruption Perception Index 1 and strengthened by the enquiry/survey conducted by the Centre for Bhutan Studies, 2009 (22). Some of the most common of these are shown in the table below. Corruption in health Much of the corruption found in the health sector is a reflection of general problems of governance and public sector accountability (23,24). Corruption reduces the resources effectively available for health, lowers the quality, equity and effectiveness of health-care services, and decreases the volume and increases the cost of provided services. A study carried out by the International Monetary Fund 1 Transparency International has published the Corruption Perceptions Index (CPI) annually since 1995, providing ample data for those researching corruption. The 2004 update is distinguished by expansion of the index to 146 countries from 133 the previous year. The index is a composite measure of 17 data sources, each comparing overall corruption levels among countries, from 13 organizations. 2

13 Chapter 1. Introduction to the Good Governance for Medicines programme TABLE 1. Types of corruption TYPE OF CORRUPTION CAUSES RISK AREAS ORGANIZATIONS AT RISK Abuse of power Bribery/kickbacks Fraud Collusion between public and private procurement Weak recruitment system for leaders, accountability, mechanisms for detection and punishment, oversight, as well as discretionary powers, general failure in the implementation of the Code of Conduct and Ethics, weak media and a tolerant culture. Uncontrolled discriminatory power, non-uniform application of laws, rules and norms, unclear and lengthy procedures, lack of information and transparency, failure to implement Code of Conduct and Ethics, inefficient service delivery, social demands and obligations, systemic flaws. Unlimited desires, lengthy procedures, unclear rules, weak supervision, and lack of checks and balances; general administration weakness and poor moral values. Non-application of the rule of rotation, lack of transparency and accountability, discretionary powers, weak oversight body, failure to implement Code of Conduct and Ethics, inefficient service delivery, poor moral values and social ties. All levels Contract administration Services delivery organizations Recruitment, promotions, transfer and training Adjudication of cases Elections Academic transcripts, bank guarantees Bills and other government clearances Government procurement system Foreign investments Processing of mining leases and rights Hiring of machinery and vehicles All institutions Central agencies Autonomous agencies Projects Judiciary Legislation Government departments Banks School admissions Construction and mining industries. Procurement section Licensing divisions Trade division Natural resources regulatory agencies using data from 71 countries, shows that countries with high indices of corruption systematically have higher rates of infant mortality (25). Corruption also affects the availability of funds from health budgets to pay salaries, fund operations and maintenance, leading to lower quality of care and reduced service availability (26). A study carried out in 2005 in one European country revealed that up to 9.5% of national expenditures on health care are estimated to be lost due to corruption. Not only does corruption affect health service delivery but it also has a detrimental impact on population health as shown by increased infant and child mortality indicators, even after adjusting for income, female education, health spending, and level of urbanization (27). Globally, the World Bank (2004) estimates that more than US$ 1 trillion is paid in bribes each year. The Asian Development Bank found that corruption adds % to the cost of procuring government goods and services in several Asian countries. There is evidence that reducing corruption can improve health outcomes by increasing the effectiveness of public expenditures (28). Research also reveals that the countries that tackle corruption and improve their rule of law can increase their national incomes by as much as four times in the long run and child mortality can fall by as much as 75% (22). 3

14 Good Governance for Medicines: Model Framework Corruption in the pharmaceutical sector Medicines represent one of the largest components of health expenditure. The value of the global pharmaceutical market has increased steeply over time, at a faster rate than the total health expenditure and even more than the growth of GDP worldwide (29). In 2009, the total value of the pharmaceutical market was estimated at US$ 837 billion (30). Such large amounts of money are an attractive target for abuse, corruption and unethical practices, and the pharmaceutical sector is particularly vulnerable to such practices. Resources that could otherwise be used to buy medicines or recruit much-needed health professionals are wasted as a result of corruption, which can result in prolonged illness and even deaths. In developing countries, pharmaceutical expenditures and drug procurements account for 20 50% of public health budgets (23,24). Making essential medicines available for everyone at affordable prices is a key condition for improving national health indicators. Inadequate provision of medicine and medical supplies has a direct bearing on the performance of the health system. Corruption in procurement/distribution of pharmaceutical and medical supplies reduces access to essential medicines, particularly for the most vulnerable groups. WHO estimates (2004) indicate that approximately 2 billion people lack regular access to medicines and that improving access to medicines could potentially save the lives of 10 million people every year (31). Corrupt and unethical practices in the pharmaceutical sector can have a significant impact on: Health: as the waste of public resources reduces the government s capacity to provide qualityassured essential medicines, and unsafe medical products proliferate on the market; it also leads to an increase in the irrational use of medicines; Economy: when large amounts of public funds are wasted: it is estimated that pharmaceutical expenditure in low-income countries amounts to 25 65% of total health-care expenditures. These significant amounts of money provide potential room for major financial loss; Image and trust: as inefficiency and lack of transparency reduce public institutions credibility, erode the trust of the public and donors, and lower investments in countries. The pharmaceutical sector is wide and complex. Also referred to as the medicines chain, it includes many different steps, beginning with the research and development of new medicines or chemical entities and ending with the consumption of medicines by the patient and pharmacovigilance. As shown in the figure below, each step is vulnerable to corruption and unethical practices. The pharmaceutical sector involves professionals from fields such as law enforcement authorities, regulators, physicians, nurses, pharmacists, economists, lawyers and researchers. These can serve in governments, private pharmaceutical companies, health-care facilities, academia or civil society organizations. Poorly defined and documented processes, lack of checks and balances, unclear roles and responsibilities, as well as lack of transparency and accountability in any part of the medicines chain will increase vulnerability to corruption (32). For example: Transparency International estimates that 10 25% of all public procurement spending is fraudulent. Equally, if institutional checks are too cumbersome and slow down processes, clients may be tempted to offer bribes or gifts to get things done. There are numerous unethical practices that increase the vulnerability of the pharmaceutical sector to corruption and thus the risks to the health of the population. Among these are: Information imbalance between various players such as manufacturers, regulators, healthcare providers and consumers. Information is not shared equally and not all players have the necessary information to make informed judgments and independent assessments of the quality, safety and efficacy of medicines. Counterfeit and unregulated medicines that are of sub-therapeutic value can contribute to the development of drug resistant organisms, increase the threat of pandemic disease spread, 4

15 Chapter 1. Introduction to the Good Governance for Medicines programme FIGURE 1. Examples of unethical practices that can happen throughout the medicines chain R&D clinical trials Cartels Patent Manufacturing Unethical donations Registration Collusion Falsification of safety/efficacy data R&D priorities Pricing Selection Conflict of interest Procurement & import State capture Unlawful appropriation royalties Distribution Inspection Unethical promotion Counterfeit/ substandard medicines Prescription Thefts Dispensing Pressure Tax evasion Pharmacovigilance Promotion Development agencies increasingly recognize corruption as the single greatest obstacle to social and economic development, creating a vicious cycle: bad governance produces corruption and cor- Overinvoicing Bribery Source: Baghdadi-Sabeti, G. and Serhan, F. (30). and severely damage patient health, as they might have the wrong ingredients or include no active ingredients at all and undermine public trust in important medicines (32,33). Unethical drug promotion and conflict of interest among physicians can have negative effects on health outcomes. Promotional activities and other interactions between pharmaceutical companies and physicians, if not tightly regulated, can influence physicians to engage in unethical practices (34). Studies have shown that these interactions can lead to non-rational prescribing (35) and increased costs with little or no additional health benefits. Patients health can be endangered as some doctors enrol patients in trials even though they do not meet the trial inclusion criteria, or prescribe unnecessary or potentially harmful treatments, in order to maximize profit (36). Conflicts of interest are also a motivating force generating unethical behaviour in many other steps of the medicines chain. A government official or expert serving on a government committee may put undue pressure or influence on the final decision to favour a particular company, instead of basing the decision on scientific evidence. Bribery and gift giving can be proactively offered or extorted by public servants. For example, suppliers can offer government officials a bribe to register medicines without the required information or to leave out findings on medicines quality in inspection reports, thus falsifying evidence. Or government officials may slow down registration procedures in order to put pressure on suppliers into paying a bribe. Other forms of corruption or unethical practices include theft in the distribution chain for personal use or diversion for private sector resale, or collusion in bid rigging during procurement by providing vendors with confidential and privileged information. 5

16 Good Governance for Medicines: Model Framework ruption destroys the basis of good governance. Corruption in the public pharmaceutical sector is endangering the health of millions of people worldwide. There is no easy and quick solution, with entrenched unethical practices throughout the interrelated stages of the medicines chain. Background of anti-corruption initiatives Since the mid-1990s, corruption and governance have become legitimate subjects of international interest and concern. Empirical research has raised public awareness worldwide of the detrimental impact of corruption on socioeconomic development and its threat to human development (1). Much of the effort put into public sector reforms during the past 15 years has been aimed in part at reducing corruption. Cross country, perception-based assessments and public opinion research show that corruption and governance are among the top concerns of people and leaders around the world, and it is now part of all national and international development dialogues and agendas (37 40). 1 Many national, regional, multinational and international organizations have worked very hard and for many years individually or together on valuable initiatives to establish frameworks, policies, instruments and other necessary standards to eradicate corruption. These initiatives, which form the basis for much of the anti-corruption work that is being done today, are supported by a number of international and multinational agreements and conventions including: The Inter-American Convention Against Corruption approved by 34 members of the Organization of American States (OAS) in 1996; The Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions signed by the 29 members of the OECD, along with five non-members in 1999; The African Union Convention adopted an Anti-Corruption covenant signed in March 2003; The World Economic Forum Partnering Against Corruption Initiative (PACI) formally launched by Chief Executive Officers from the Engineering and Construction, Energy and Metals and Mining Industries in January 2004; and The United Nations Convention against Corruption (UNCAC) adopted by the United Nations General Assembly Resolution 58/4 of 31 October 2003, published in September These anti-corruption conventions and agreements are based on international consensus regarding the laws and mechanisms that must be established and implemented at national and international levels to combat corruption. The OECD and OAS Conventions are regional in scope, while UNCAC is global in reach. The OAS Convention is the first international agreement to address corruption on all scales, and as such is more ambitious and broader in scope than the OECD Convention, which focuses primarily on legal measures to address the corrupt business practice of bribing foreign public officials. The OAS Convention directs signatory States to develop and strengthen legal mechanisms to prevent, detect, punish and eradicate official corruption. It differs from the OECD and The adoption of the United Nations Convention against Corruption will send a clear message that the international community is determined to prevent and control corruption. It will warn the corrupt that betrayal of the public trust will no longer be tolerated. And it will reaffirm the importance of core values such as honesty, respect for the rule of law, accountability and transparency in promoting development and making the world a better place for all. Kofi Annan, former UN Secretary General. UNCAC foreword, September 2004 (41) 1 The International Country Risk Guide (ICRG), whose data have been used extensively in quantitative research, began its surveys in The Business Environmental Risk Intelligence (BERI) began to provide governance-related, survey-based indexes in the early 1980s. The Economist Intelligence Unit began providing related data around this time as well. For more recent additional sources, see Political Risk Consulting (http://www.asiarisk.com) and the World Economic Forum (http://www.weforum.com). 6

17 Chapter 1. Introduction to the Good Governance for Medicines programme the United Nations anti-corruption conventions because it is not grounded principally on trade or economic concerns, but on morality and the need to protect democratic institutions. The process of enforcing UNCAC began in December Over 140 signatory States participated in the UNCAC conferences held in Indonesia in January 2008 and in Qatar in November One of the key issues addressed was the need to establish adequate mechanisms to monitor the enforcement of the Convention, a need shared by the OAS and OECD, although valuable experience has been gained and is being shared between regions. Systematic monitoring and reporting by civil society organizations (CSOs) and by the press are essential to promote awareness of corruption issues and to mobilize the public support and political will necessary for the successful enforcement of these conventions. Governments must demonstrate to the public the measures and mechanisms that are being applied to enforce the conventions, to prevent corruption, and to ensure legal cooperation among states. It is within the context of this movement and its spirit of reform that the Good Governance for Medicines (GGM) programme draws great support for its activities in promoting good governance in the pharmaceutical sector, and builds upon the legal framework and mechanisms of enforcement established by the anti-corruption conventions ratified by the signatory States. Overview and progress of the Good Governance for Medicines programme worldwide In an attempt to curb corruption in the pharmaceutical systems, the World Health Organization (WHO) established the Good Governance for Medicines programme (42). The GGM programme focuses on the fundamental need to have in place laws, regulations, policies and procedures based on ethical principles to improve the management of pharmaceutical systems and create a corrupt-free environment to promote access to quality-assured medicines. Its primary emphasis is on prevention of corruption and on improving systems. Good governance is an essential factor for sustainable development and economic growth at all levels and within all sectors of society. There are many definitions of governance and good governance. Yet, there is an emerging general consensus that governance is about managing the resources and affairs of society to promote the well-being of its members. In the WHO GGM programme, good governance refers to the formulation and implementation of appropriate policies and procedures that ensure the effective, efficient and ethical management of pharmaceutical systems, especially in medicine regulatory and supply systems, in a manner that is transparent and accountable, and follows the rule of law and minimizes corruption. General objective The general objective of the GGM is to contribute to health systems strengthening and prevent corruption by promoting good governance in the pharmaceutical sector. Specific objectives i) To raise awareness of the impact of corruption in the pharmaceutical sector and use this awareness to inform the national health policy agenda; ii) To increase transparency and accountability in medicine regulatory and supply management systems; iii) To promote individual and institutional integrity in the pharmaceutical sector; and iv) To institutionalize good governance in pharmaceutical systems by building national capacity and leadership. The GGM programme is implemented in a 3-step strategy to institutionalize good governance in ministries of health, as shown in Figure 2 below: 7

18 Good Governance for Medicines: Model Framework FIGURE 2. WHO model process to implement the Good Governance for Medicines programme Clearance MOH PHASE I National transparency assessment PHASE II Development of national GGM framework PHASE III Implementation of national GGM programme Assessment report GGM framework officially adopted GGM integrated in MOH plan Following the launch of the GGM programme in 2004 as a pilot project in four countries, the programme has been very successful and currently comprises 36 countries. A detailed description of the GGM process is provided below. Phase I For Phase I, a standardized assessment instrument entitled Measuring Transparency in the Public Pharmaceutical sector provides the methodology to measure the level of transparency and vulnerability to corruption in key functions of the pharmaceutical system (43). Independent national assessors evaluate the country s vulnerability to corruption using the WHO standardized assessment instrument, which focuses on-key functions of the pharmaceutical sector. On completion of the assessment, a report with the findings and recommendations for action is produced, providing a baseline to monitor the country s progress over time. The assessment has been conducted in 26 countries and to date WHO has published the results for 14 countries (44). The country studies as well as transparency monitoring carried out in 15 countries in 2010 have produced valuable data enabling ministries of health and medicines regulatory authorities to identify gaps in the system and develop strategies to close them (30). For a comparative analysis of transparency assessment reports, please consult the GGM chapter of the 2011 World Medicines Situation (31) or the individual country assessment reports available on the GGM website (44). Phases II For Phase II, this model framework serves as a guideline for countries to develop their own national GGM framework, after analysis of the results for the Phase I assessment, based on a nationwide consultation with key stakeholders and contextualization to national situations. It integrates the top-down and bottom-up approaches necessary to promote good governance and to reduce corrupt practices. This document, once adapted to the national context, should be officially adopted to guarantee institutionalization within the legal, ethical and political structure of the ministry of health (MOH). To date 11 countries have developed their national frameworks: 8 have been officially adopted (Benin, Bolivia (Plurinational State of), Jordan, Lao People s Democratic Republic, Lebanon, Malaysia, Thailand and The Former Yugoslav Republic of Macedonia) and 5 have been drafted (Malawi, Mongolia, Philippines, Republic of Moldova, and Syrian Arab Republic). 8

19 Chapter 1. Introduction to the Good Governance for Medicines programme Phase III This Phase involves implementation of the national programme and focuses on translating the guidelines of the Model Framework for GGM into action, institutionalizing the programme and ensuring that it is fully integrated within the MOH of each country. To date, seven countries are in phase III of the implementation of GGM (30). Worldwide, the programme is being increasingly adopted based on an apparent great need in the subject area. Its preventive and constructive approach is appealing as well as its focus on processes and systems. The progress of each country from one phase to the next depends on champions that are dedicated to the success of the programme and that have strong ethical leadership and governance, an active and dedicated GGM team, high political will and support, GGM integrated in other structures, collaboration with key stakeholders and anti-corruption movements. Challenges experienced are a passive attitude towards corruption, resistance to change, political instability, bureaucracy, high rotation of staff, and other priorities. GGM is also contributing to WHO s current health systems strengthening by promoting transparency and leadership, thus preventing corruption in the medicines sector and maximizing the use of limited resources. GGM is the first global initiative in this field. Countries` interest in implementing GGM is much higher than anticipated 36 countries currently applying the programme). The GGM programme focuses on strengthening knowledge, values, attitudes and ethical behaviours that help each individual raise his/her level of consciousness in order to prevent corruption. It also helps create legal and social mechanisms that enhance these ethical behaviours. The increase in the level of consciousness and ethical leadership will help promote higher standards of transparency in areas such as governance, medicines and technology, information management and recruitment of human resources. This, in turn, will have an impact on financing and service delivery. GGM has developed a technical package of tools, guidelines and training materials that provide universal and internationally recognized standards for governments to adapt and use depending on their local context. The GGM promotes transparency and leadership in the key medicine areas of development of national medicines policy, access, quality assurance and rational use of medicines. This document was prepared for the use of health professionals, decision-makers, managers, policy-makers and MOH personnel involved in GGM in their countries. It can be used as a guide or model for their country GGM frameworks and programmes. The successful examples included in this document are from countries in phases II and III of the programme and are only a few of many to inspire and help the GGM teams worldwide in their anti-corruption efforts. 9

20 Good Governance for Medicines: Model Framework CHAPTER 2 Basic components of the model framework The model framework for good governance for medicines is intended to be a guideline and can be adapted by each country according to their needs. It includes the basic components required by the GGM programme and steps necessary to achieve these. The basic components of the GGM framework are divided in two strategies that are complementary: Values-based strategy: this strategy attempts to increase institutional integrity by promoting key ethical principles and moral values as a way of motivating key actors to behave ethically. It is a bottom-up approach within institutions, based on consensus-building of shared ethical principles. Participation of key actors in the process of consensus-building generates a sense of ownership and personal identification. Discipline-based strategy: this is essentially a top-down legislative process that establishes anti-corruption laws, policies and administrative procedures, and attempts to impose compliance with them through legal sanctions. Experience with these two strategies has shown that a complementary use of both is required in order to have a significant impact on establishing ethical practices within institutions and governments. There are 10 basic components of the model framework, each of which belongs to one of the strategies listed below. Values-based strategy 1. Key ethical principles 2. Code of conduct 3. Socialization of key ethical principles 4. Promoting ethical leadership Discipline-based strategy 5. Enforcement of existing anti-corruption legislation 6. Mechanisms for whistleblowing 7. Sanctions on reprehensible acts based on anti-corruption legislation 8. Transparent and accountable regulations and administrative procedures There are also two cross cutting components that need to be integrated within both strategies: 9. Collaboration among anti-corruption agencies, civil society organizations and the private sector 10. Management, coordination and evaluation. These 10 components are further explained below. 10

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